<!DOCTYPE html>
<head lang="en">
  <title>CP1 Reversion</title>
  <meta charset="utf-8">
  <link href="../style.css" rel="stylesheet" type="text/css">
</head>

<body>
  <h1>Investment section</h1>

<div class="column side">
   <p>Reasons for holding cash</p>

   Liquidity: meet liabilities, uncertainty in the outgo, immediately after a cash inflow, seize investment opportunities.
   <br>
   Short – term tactical reasons: rising interest, recession, depreciation -> overseas investment more attractive

</div>

<div class="container">
  <div class="column middle" >
    Liquidity
    <div id="content">
      <ul>
        <li> To meet short term liabilities.
        </li>
        <li>institutions with uncertain liability outgo (e.g. non-life insurance companies) may hold more cash to meet unexpected payments
        </li>
        <li>after receipt of a large cash inflow (e.g. a transfer value for a pension scheme), cash may be held whilst the suitability of other investments is considered
        </li>
        <li>maintaining a liquid base allows an investor to take part in investment opportunities that may arise from time to time
         </li>
      </ul>
    </div>
  </div>

    <div class="column middle" >
      Short- term tactical reasons
      <div id="content">
        <ul>
          <li>rising short-term interest rates will tend to depress both bond and equity markets
          </li>
          <li>start of an economic recession
          <br>
          likely to lead to a fall in equity markets and, perhaps, also a rise in government borrowing -> falling bond price
          </li>
          <li>depreciation of domestic currency
            <br>
          makes overseas cash investments more attractive
          <br>
          also, domestic interest rates may be raised to defend currency
          </li>
        </ul>
      </div>
    </div>


</div>

</body>

<footer>
  <p> Author: Mengke, Lyu</p>

</footer>
